2024 is a troublesome year for many startups in Kenya. For the automotive sector, the tide also seems to be shifting in the wrong direction after Kenyan-based automaker Mobius Kenya shut down after a year-long attempt at recovery.
Here’s the truth: Kenya has not had any luck in the automotive manufacturing sector since the Nyayo Pioneer car. If anything, the dream of having Kenya’s first car embarrassingly failed in its infancy.
Several years later, Mobius Kenya, an automotive company with the backing of Playfair Capital, came to save the day. On 5th August, after a shareholders meeting, the decision to close the curtains was unanimous after what was seen as 13 years of success.
In an interview, Mobius Director Nicolas Guibert said it was resolved that the company be placed under liquidation in line with Section 393 (1) (b) of the Insolvency Act in Kenya.
According to the 2015 Kenyan Act, companies can close shop per the board’s resolution.
This is a shock to many Kenyans, especially in the automotive scene, who’d witnessed the pioneering auto manufacturer in Kenya raise about $56 million in five funding rounds. The carmaker targeted SMEs developing affordable SUVs for the agricultural and supply industries located in remote areas of the country.
The company was not straightforward about the reason behind the liquidation. Still, their sudden stride into the sunset comes after a burden of debts and disputes with the tax man (Kenya Revenue Authority).
“Mobius ran out of money and could barely make rent, let alone pay salaries. 45 employees only learned yesterday that it was their last day and the firm was going out of business,” Larry Madowo, CNN reporter, posted on X.com.
According to the automaker’s financial statements (2020), it was drowning in debt of close to Ksh 650 million and had a shareholder deficit of about Ksh. 390 million.
According to Mr Guibert, a formal list of debtors will be made available for inspection by 9th August.
Mobius Kenya was founded 13 years ago by British businessman Joel Jackson. Its objective was to develop cars for the African market. The first Mobius debuted in 2015 in Kenya and has been a beacon of pride in the country’s automotive sector.
